#mortgages #mortgageapplications #homefinancing
Yahoo Finance Contributor Vera Gibbons report on what’s driving the significant drop in mortgage applications.
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It’s HOT 🔥
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Housing Bubble 2.0
Not this year. Too many buyers, not nearly enough homes. There are less then 250k entry level homes on the market in the entire country.
@Jesse Low inventory is mostly caused by homeowner’s expectations of lucrative YoY capital gains. If those expectations evaporate then there would be a lot of inventory.
There also haven’t been any central bank rate hikes yet. Once the fed starts hiking they’re probably not going to be able to stop until rates are much higher. The house-price component of CPI actually goes up when rates rise and prices are flat or up.
Whether or not that affects things before year’s-end is debatable.
@EWaste the reason for low inventory is a lack of building. Banks and builders in the game are the same ones from 2008, and they haven’t forgotten. The pandemic added to that. People with at own aren’t moving because of uncertainty, as they cannot find a home for a decent price, so they stay put. Something will give eventually, but I think it’s going to take a while.
@Jesse I’m sure if FOMO buying wasn’t a factor there would be plenty of inventory to go around. If interest rates normalize we should get a better picture of real housing need, not just speculative demand.
It’s HOT like my ass!
So in other words, it’s dropped back to normal pre pandemic
It has everything to do with low inventory. I mean, if there’s really not much on the market, it makes sense that applications dropped.
@Jesse plus refi is drying up, which was the majority of most loans in the past 2 years
@Mark Jarrett yes, refinances are down for two reasons:
– Most people that were able to refi, had already done it already at a lower rate.
– The rate is up to 4%, and it would not pay to refi
Why is this a surprise to anyone ?
It’s not a surprise. There is record low inventory, so that would have a direct correlation to lower mortgage applications.
@Jesse and higher rates lol no more refi volume
@Krassimir Petrov yes, exactly. Everyone that was going to refi already did it, and those that haven’t are maybe at 5%, looking at 4% rates and closing costs, and refinancing is t going to save them any money. This is some really simple stuff, but the media and these YouTubers making videos for cash like to leave the obvious out, and play on emotions of the ignorant.
Anyone that buys a home now will deeply regret it in a few years.
@Tracy King rates might be higher, but the price will be lower. Whose going to pay 600k for a 100k house?
Total cost of the mortgage… Just to be clear.
@Jesse And will go back to 2008 prices. It’s fine though if they stay in that house till death
@S A gimme a break. So many cynics in these comments sections, and they have not idea about the market. My guess is they are young, ignorant, and angry, or they older and failed at generating wealth.
The sky is falling, right? Go watch the news more to feed your negativity. Those of us that follow very basic rules will keep building wealth. There will always be haves and have nots, and the haves don’t view everything with negativity.
@DW Ethiopia he is referring to this market numb nuts
10-15 years baby boomers start passing away en masse or phasing out of their homes. Prices are high right now because the two largest generations in history are in the market. When one leaves, inventory goes up, prices come down. Next crash is 15 years out, but it will be epic.
Any substance to her claims? People who got evicted and cant afford rent suddenly can afford to buy a house?
She is a clown
It’s more than drop mortgage applications dropping cause there are no houses to buy
People are giving up. The system is broken.
Not really. We have the lowest housing inventory on record, so barely any homes for sale = low application rate.
@Jesse Barely any inventory = no revenue
This contributor makes me laugh! Some people HAVE TO BUY (…because their rent went up…they need to pay 20, 30, 40,000 over asking…cheaper pay pay the rent increase, LOL!!)!! The market is completely nuts. Don’t buy anything unless you want to be chewed up in the downcycle!!
This is what happens when you destroy the bond market. Trillions of dollars now desperately looking for positive yield.
Exactly. And obviously they don’t give a shi*. Or they woulda upped rates last year, last quarter, last month. This house price squeeze is on purpose
I’ve owned my home for 15 years. Have about $400k in equity. I will stay where I’m at because I don’t want to spend triple my mortgage payment on rent per month. Not worth it to me.
Triple your mortgage payment for only a couple years vs selling your home while it’s double it’s value… you clearly make more money selling your home.
Smart move 👍
capitalism is a failure
New mortgages or refi?
We are first time buyers and needing a family home. Who te hell can keep up with housing
What state are you in Jessica!?
FOMO. These people are going to be remorseful and house poor.
About that anecdote about the buyer in Florida. Sight unseen. Waived the inspection. Submitted offer. Won the bid. Good luck lass, you may have bought a money pit.
I would never waive inspection or appraisal. Not for the biggest investment of my life. That’s just foolish.
Fomo is over … other shoe 👠 fall coming …
🤮
Does this mean home prices will drop dramatically in the next 1-3 years???
@Jordan W the issue is that a lot of people prophecising some huge crash aren’t aware of the fundamentals at play. Most of them are trying to equate to the 2008 market by way of “high prices = crash” but that’s inaccurate. The 2008 market had a supply glut that was over-leveraged and highly speculative and the subprime loans out there made for a lot of risk on lender’s end. Here in 2022 we have a supply shortage, tight lending regulations, and pent up demand. There’s only enough housing starts in the pipeline right now in the next 24 months to make up about 20% of the demand out there so we will still be in a shortage for several years. Additionally, total mortgage defaults right now looks to be about 10% of what it was during the 2008 financial crisis – barely enough to make a dent even if they all hit market at the same time, which they won’t. The point being, if prices fall even a tiny bit there’s an army of buyers just waiting, chomping, to buy. That demand floor will keep prices relatively close to where they currently are. Maybe a little bit down if inflation and rate hikes really hit hard.
The wild card is the investors. Investors are buying up around 15% of homes sold recently. More than their share historically. If rent prices collapse as the eviction moratoriums come to an end, a lot of investors may start to dump properties & loosen up the supply more quickly than if we had to wait on new home builds. So, the 20% drop you’re looking for may be a possibility.
@Ryan Frazier i agree with you 100%. I talk to people who believe there will be a huge correction of at least 40% because of ‘08. Although I think it will fall, there will be a lot of buyers lined up ready to buy. Most people don’t think of these other buyers at all and expect to be able to have their pick of the litter with a huge correction.
@Ree S the eviction moratorium is unlikely to move enough people to collapse rent prices. The thing you have to keep in mind is that there is pent up demand even today. Even at today’s high prices there are still houses getting 3-4-5 offers at a time and many over asking price. Apartments are still getting applications left and right. If we finally hit a point where people simply can’t afford or won’t pay a given price then yes, prices will fall, but if they dip 3% and find a buyer then there you go, it’s a 3% correction.
@Ryan Frazier My county currently has more than 3100 open eviction cases, which is close to 1% of the total population here. Rent prices are high because people have artificially been kept in place by moratoriums, making the rental supply temporarily tight. If that number of rental units come back on the market over the next year, we’ll definitely see a steep drop in rents here. I also suspect it will cause some of the smaller landlords, who got burned, to sell. No one knows what the future will bring, but I wouldn’t buy until this eviction mess plays out.
“Taking the L” – fantastic reason to click away from this video within the first 10 seconds. Speak properly or don’t be taken seriously.
Umm 4% is the reason duh
😂😂ZILLOW😂😂😂
Seattle City Council just voted to end the eviction moratorium starting Monday 2/28/22. Now everyone is saying rents will skyrocket….but it is unclear whether the number of those who can’t afford the existing rents are outnumbered by those who can…and are looking. I think there will be a short burst of rent increases as landlords try to recoup their losses the past few years. But where are all the new renters going to come from?
Really? That’s going to be interesting. Any idea on the Spokane market? It’s still sizzling hot over here. I think there’s plenty of people reshuffling and looking to get into something else even if the rent is higher.
Great question. A lot of investors bought houses at very high prices and need to extract very high rents for the investment to pan out. Wages went up, but not nearly as much as home/rent prices. So where are these high value renters going to come from?
Never trust a RE agent to tell you what is coming in the market. When gravity switches back on a lot of these ex-cheerleaders will be pole dancing.
It’s not real growth. These prices should fall to prices below 2019. It’s due to low rates, government stimulus, and the FED buying MBS & corporate bonds. This market is overpriced.
Wrong! Prices will continue to increase but at a lower rate. 1. Rent is increasing year over year even before the pandemic. 2. Inflation causes everything to go up price of wood, materials, and etc so any new housing construction will factor in this price which will also increase the prices of homes in the area. 3. Oil prices is supposed to hit new record highs which again increases the prices of good and services. 4. Global trade supply is still down, but demand for consumer goods is still high. 5. Spring and summer is the busiest time to buy a house. 6. Uncertainty in the world, a lot of people won’t be selling which means it will still be a sellers market for a while. 7. High interest rates no one will be selling their homes just to buy a home at higher monthly mortgage payments. Clearly you do not understand the situation the world is in right now. 8. Housing prices will decrease once federal reserve increases interest rates but will steadily increase at a slower pace probable 5%-7% year over year.
The only people selling homes right now are people trying to make a profit and people who can’t afford their homes because of the pandemic.
In your dream smh
So I give you economic analysis and data and your reply Is in my dreams. Explain your position without using your own personal opinion. Back up your claim with evidences. I wanna know why you think the housing market will fall!
@Samuel Thompson hey chill~ I totally agree with you 100%. Seems like some people think this is like 2008 and housing market will crash Lol I guess they will see housing market crash in their dream LOL
Millennials need to grow up and realize this is the new norm. OR buy some land and build in 2023 or 2024. Get creative!
Who wants a mortgage when there’s a possible ww3 better stock up on food and fire arms to survive.
And Campbells Soup 🍜;)
We have seen a lot of crazy for the last few years. A lot of people are spending more than they can afford on housing and using magical thinking to justify the prices. People think they are playing with Monopoly money. The punch in the face is coming.
welcome to 2007 2008 all over again watch the bubble pop in April after rate rises and no more qe.
BIG FAT BUBBLE JUST WAIT IT OUT PEOPLE. ITS ENDING SOON
For someone who invested so heavily in CAPITALs, it is easy for you to say. 🤭
He really said “Taking the L”
Zillow 😂 they stop buying homes I wonder why maybe because they are selling homes and telling Americans to buy there homes because they know it will fall but they are predicting it will go up I feel bad for brainwashed people
Who honestly has $800k in cash to throw at a house? How many of these people can there actually be.
My question exactly! All cash buyers for $7,8,900K homes? Come on.
@buckbiro they are investors, some from outside the US
The baby boomers fearing the market will crash again, so they buy homes instead. When it crashes, they will earn less in rent than they expected. They will bitch and complain. And no, they don’t deserve a bailout.
@Sly Tech Can’t wait!
How does New York City have 76 separate cities
In the face of recent data, Gibbons says the market will be sizzling!?! How can it be sizzling if the most people since 2019 are on the sideline?
Likely from investors. We are seeing a lot of corporation buying homes and renting them out in our market
Most people? Look at the houses that are hitting the market. They are on fire. Most people who are on the sidelines are the broke ones
@kingkobra Yes. Again, most people are sidelined. They started the segment by saying mortgage applications are at their lowest since 2019. Remember that? When nobody was buying houses? People aren’t broke, they just can’t/won’t pay exorbitant prices.
Stop price gauging us – I want to buy a house damnit!
You will be fine~ you will find the true happiness soon enough.
“You will own nothing and you will be happy.”
Kamala Harris is financial advisor to Black Rock. Black Rock buying/driving up all real estate. Average Americans cannot afford a home. Thanks Kamala…hurting american families.
Legend says that what goes up, comes down
THIS INTERVIEW IS NOT GOING TO AGE WELL WHEN THE HOUSING MARKET CRASHES
THERE IS NO HOUSING MARKET CRASHES AND PEOPLE WILL STILL TALKING ABOUT “CRASH” “RECESSION” EVEN 10 YEARS LATER WHEN YOU GUYS ARE STILL PAYING FOR HIGHER RENTS AND HOMEOWNERS ARE BUILING THEIR ASSETS 😎
People still trust Zillow’s data. That’s like trusting a CNBC Analyst.
Like trusting Fox News
I’d rather to believe Zillow than all youtubers who claim themselves “experts” and crying about “crash” and “recession” last 10 years.
Ballon it is.
Bullhead City, AZ. Directly across the Colorado river from Harrah’s casino is a place you can buy and is still dirt cheap. There are commercial lines some of which have a mobile home or house that you can buy for under 150,000 and it includes the land. Great business opportunity.
I just checked several real estate listing sites and there isn’t a single property on the market that matches your description.
Nobody trust greedy zilow any more
Di she low her expectesions? that backgroung of her house is pretty bad.
Lol she said lower your expectations? If I’m going to pay money for a home… then it better be what I want. If not, then just wait it out till the market cools. Also, what’s the difference in paying $100k over asking and jumping through hopes (going into debt) to get the home than just staying in a place paying a rent increase? At the end of the day, you’re still on the hole…??
overbidding 100k is fucking stupidity!
Wait…
Nobody is trying to pay 100k over for a home
I might want to sell one of my homes in Arizona. Anybody interested. You know the market is brutal
Greed wins again
These new buyers are house rich, but cash poor. They will adjust their spending by spending less in the economy. Small businesses will shut down more.
At least they are paying for their asset. I’d rather being a house rich, not paying a rent to corporations and not able to contribute my asset
@Hyun Park sure nobody can debate that, but all one’s income is concentrated mostly on one asset. God forbid for sickness and medical bills, not to mention the peace of mind that one can always pick up and leave with their money. When you have a house, especially one that’s sucking most of one’s income, that person is stuck in the area until they sell the asset.
For me, these exhorbitantly overpriced houses just aren’t worth buying. Especially a fixer upper. I’ll continue saving my money and if houses are ever reasonably priced and I find a house I want, I’ll pay cash for it. No loan. No debt=No stress.
Cash investors in SOUTH FLORIDA are wreaking havoc. Wait until tax and home owners insurance roll around.
Buyer fatigue is starting to set in.
Buying land will be the way to go…not a house
Just don’t pay more than $500 an acre.
The real estate market is a pure joke. Who in their right mind would pay 40k-100k over market price.
Smart ones are saying forget about it and the dumb ones are the FOMO buyers
When purchasing tulips…. The caption reads: “Mortgage applications drop to lowest level in over two years. ” The interviewee tells us that the housing market is as strong, perhaps stronger than ever. Reports say, interest rates are rising. The interviewee says: Sellers, increase your asking price. Reports say, supply of homes are increasing. Interviewee says, buyers should structure counter bids such that original bid for less desirable homes automatically increase then tops competing offer.
Annoying liberal. This is why I don’t date. You get cvnts like this pushing overpriced houses
Wow this woman is full of crap
I just bought and sold a house this week. Fake news
Cash buyers will like this.
I was looking but, lost my job. Things will only get worse in this country. Hopefully an overthrow of the government is coming soon.
Putin might give you that glimmer of hope……KABOOOOOOM !!!!
1116 sw D Ave
Dream house ✨
👍
13% decline from when/where? What is your frame of reference?
😂Duh…there are no homes to buy
your analysis is “correct” between quotes lol
At 4% mortgage rate already no body is buying.
At 5% expected to touch by summer mortgage industry will be “LIGHTS OUT”.
ZILLOW was the Canary in the real estate mine…. Once the hedge funds start liquidation their portfolio of houses they bought in the last 2 year it will be Armageddon.
Everybody who paid 50k-100k above asking in last 2 years… God help you.
Soooo funny! It ain’t “nobody is buying.” There is no inventory so they CAN’T buy LOL less inventory and competing all those cash offer that’s all smfh😂🤣😂🤣
New Jersey is coolong
Haha she is quoting zillow… really????
She is actually suggesting to waive appraisal… don’t listen to such ppl… it can get you stuck in bad homes…
Overpaying for houses you don’t like. This reminds me of 2006.
Moved out from apartment 1 year ago. I bought a travel trailer and rent a place to park it. I rather make a payment to a travel trailer instead of give the money to the apartment (fck them).
Bunch of cry babies…greetings from a Vancouver BC resident.